Stock Upgrades, Downgrades From TheStreet.com Ratings

Each business day, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Buy, hold or sell ratings designate how the Ratings group expects these stocks to perform against a general benchmark of the equities market and interest rates.

While the ratings model is quantitative, it uses both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and company earnings forecasts. Objective elements include volatility of past operating revenue, financial strength and company cash flows.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe a rating alone cannot tell the whole story, and that it should be part of an investor's overall research.

The following ratings changes were generated on Feb. 28.

Stone Energy (SGY Quote), which engages in the acquisition, exploration, development, operation and production of oil and gas properties, has been upgraded to buy. For the fourth quarter, Stone swung to a profit of $2.33 a share from a loss of $10.85 a share a year ago. Revenues rose 13% to $201.6 million over the same period. At 78%, the company's gross profit margin is very high, and its net profit margin of 32.20% significantly exceeds the industry average.

Powered by its strong earnings growth and other factors, this stock has surged by 69.42% over the past year, outperforming the rise in the S&P 500 Index during the same period. We believe the stock should continue to move higher despite the nice gain. Stone Energy had been rated hold since Sept. 19.

BioMarin (BMRN Quote), a pharmaceutical company, has been upgraded to hold. Strengths including robust growth in revenue and EPS and solid stock price performance are countered by poor balance-sheet management. For the fourth quarter, revenue leapt 104% year over year to $44.9 million, and EPS swung to a profit of 3 cents from a loss of 11 cents in the year-ago quarter. At 86%, the company's gross profit margin is very high, but its net profit margin of 5.7% significantly trails the industry average.

The stock has surged 132% over the past year, but we do not recommend additional investment in this stock. Biomarin's return on equity of -8.4% has significantly outperformed the industry average, but has underperformed the S&P 500. The company's debt-to-equity ratio is very high at 3.04, implying very poor management of debt levels. However, its quick ratio of 9.79 indicates an ability to cover short-term cash needs. BioMarin had been rated sell since TheStreet.com Ratings initiated coverage on Feb. 27, 2006.

AstraZeneca (AZN Quote), a pharmaceutical company, has been downgraded to hold. Strong revenue growth and high profit margins are balanced by poor debt management, deteriorating net income and a disappointing stock-price performance. For the fourth quarter, revenue rose 14% year over year to $8.3 billion, but EPS declined to 86 cents from 93 cents over the same period. Net operating cash flow increased 39% to $3 billion, far surpassing the industry average cash flow growth rate. At 86%, the company's gross profit margin is high, but its net profit margin of 15% trails the industry average.

AstraZeneca's debt-to-equity ratio of 1.02 is higher than the industry average, and the company maintains a poor quick ratio of 0.99. Shares have fallen 30% in the past year, bringing the stock's P/E to 10.5. Shares of AstraZeneca are cheaper than the industry average, but due to other concerns, they are not a good buy right now. AstraZeneca had been rated buy since TheStreet.com Ratings initiated coverage on Feb. 27, 2006.

British Sky (BSY Quote), a British pay TV broadcast company, has been downgraded to hold on poor margin performance for the second quarter of its fiscal 2008 and on its complex financial and legal issues. However, we are positive on the company's robust revenue growth and strategic initiatives.

Operating margin declined to 12% from 19% year over year. The company reported a net loss of $393.5 million, vs. a profit of $264.7 million in the year-ago quarter.

The British government is considering legislation aimed at curtailing illegal Web downloads by forcing Internet Service Providers to monitor consumer downloading. This regulatory change, if put in place, will add enormous costs to companies like British Sky.

For the second quarter, revenue grew 5% to $2.46 billion year over year, due to strong subscriber growth, a 35% increase in product sales, higher average revenue per user and a lower churn rate. The company's telephony and broadband offering, "Sky," is currently the U.K.'s fastest-growing home telephone and broadband service. The customer base for the telephony service "Sky Talk" crossed a million customers within 18 months of its launch. In October 2007, British Sky decided to offer broadband, telephone and digital terrestrial television services under the Picnic brand to customers across the U.K. This step is expected to further expand the company's addressable market. British Sky had been rated buy since June 9, 2006.

Ormat Technologies (ORA Quote), which engages in the geothermal and recovered energy power business, has been downgraded to hold. The company shows an increase in net income, growing revenue and a solid financial position but also displays disappointing return on equity, poor profit margins and feeble EPS growth. For the fourth quarter, earnings per share increased to 22 cents from 12 cents on a 6% revenue increase to $70.7 million.

At 0.62, Ormat's debt-to-equity ratio is low, but its quick ratio of 1.00 could cause future problems. Gross profit margin of 15% is extremely low. However, at 13%, the company's net profit margin exceeds the industry average. Return on equity has slightly decreased to 4.4% from 7.8% year over year. With a P/E of 63.97, the stock trades at a substantial premium to others in its industry. Ormat had been rated hold since Aug. 27.

Additional ratings changes from Feb. 28 are listed below.

Ticker	Company Name	Change	New Rating	Former Rating
AZN	ASTRAZENECA PLC	Downgrade	Hold	Buy
AZO	AUTOZONE INC	Upgrade	Buy	Hold
BMRN	BIOMARIN PHARMACEUTICAL INC	Upgrade	Hold	Sell
BSY	BRITISH SKY BROADCASTING GRP	Downgrade	Hold	Buy
COKE	COCA-COLA BTLNG CONS	Downgrade	Hold	Buy
HW	HEADWATERS INC	Upgrade	Hold	Sell
INSU	INSITUFORM TECHNOLOGIES	Upgrade	Hold	Sell
MFCO	MICROWAVE FILTER CO INC	Upgrade	Hold	Sell
AGWS	PCC GROUP INC	Initiated	Sell
SGY	STONE ENERGY CORP	Upgrade	Buy	Hold
PGC	PEAPACK-GLADSTONE FINL CORP	Upgrade	Buy	Hold
SIRF	SIRF TECHNOLOGY HOLDINGS INC	Downgrade	Sell	Hold
ORA	ORMAT TECHNOLOGIES INC	Downgrade	Hold	Buy
EDR	EDUCATION REALTY TRUST INC	Upgrade	Hold	Sell
NCIT	NCI INC	Upgrade	Buy	Hold
SSBX	SILVER STATE BANCORP	Downgrade	Sell	Hold
NHWK	NIGHTHAWK RADIOLOGY HLDGS	Downgrade	Sell	Hold
OMAB	GRUPO AEROPORTUARIO DEL CENT	Initiated	Sell
MEDE	MEDECISION INC	Initiated	Sell